By Friday afternoons, commodity trading desks typically shift their focus from making money to managing risk, as they can't adjust their bets until markets reopen on Sunday evenings. However, the emergence of crypto exchanges offering perpetual futures contracts has changed this dynamic.
Traders can now hedge their exposure over the weekend, potentially capturing profits if the market becomes chaotic. While the volume of perpetual futures trading is still smaller than traditional markets, it's growing and influencing the way traders behave. The ability to trade 24/7 is also providing a new source of price discovery, allowing traders to gauge the direction of the market before traditional markets reopen.
As the use of perpetual futures continues to grow, it may reshape the traditional market and force a rethink of the 'weekend effect.'